Pre-Approved Credit Card Offers Are Utter Nonsense

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So you got a letter in the mail saying you were “pre-approved for a credit card.” Or an e-mail inviting you to apply for the latest credit card.

You jump at the chance to get approved for a credit card and apply immediately assuming you’ll be given the thumbs up in a matter of seconds. But after filling out the online application form you see the dreaded “Thanks, we’ll let you know…” page.

What went wrong? After all, you were pre-approved and “invited,” so there’s no reason you shouldn’t be instantly approved, right?

Why do they need more time? They already said you were approved so what gives?

Pre-Approved Does Not Equal Approved

Well, the truth is, pre-approved does not mean approved. Otherwise it would just say approved wouldn’t it?

What credit card issuers mean by “pre-approved” is that based on the information they have at the time of sending you the invitation, you should be approved for their credit card.

Unfortunately, the information they have may not be all-encompassing or totally current, especially depending on when they got the info and when you subsequently apply.

A credit score (and credit report) is a moving target that can change from day to day based on all sorts of stuff.

Once you apply for the credit card in question, the card issuer will still pull your credit and it will result in a hard inquiry.

From there they’ll be able to see if you still have the excellent credit they were expecting you to have, or the excellent credit you had when they bought your info from the credit reporting bureaus.

If you don’t for any reason, you might not actually get approved. You’re still pre-approved though…if that’s any consolation…it’s not, I just felt like being cheeky.

What Went Wrong?

Well, there are a number of things that can happen between the time credit card issuers get your info and you apply for one of their offers.

Perhaps you missed a credit card payment or ran up a bunch of debt. Or, maybe you applied for too many credit cards in a short span of time. That new 5/24 rule from Chase is a perfect example of how pre-approved can be utter nonsense.

I will use my own personal story to illustrate. I recently applied for the Chase Sapphire Preferred after receiving an e-mail from Chase inviting me to apply.

I knew I had opened 5+ credit cards in the past 24 months, so I assumed I’d get rejected. But I wanted to test it just to be sure. I don’t really care about the inquiry. My credit scores are just fine.

Unsurprisingly, I was rejected. I got that annoying screen saying they’d let me know, and an equally annoying e-mail from Chase thanking me for submitting an application. Way to let me down easy…

Ultimately I knew my application was DOA because of their new rule regarding too many accounts opened in recent history.

To test the rule even further, I went to a Chase branch and spoke to a banker I know fairly well there. She tried to push my application through using a special consideration form.

This form basically highlights your other accounts with Chase in hope of garnering approval as an existing, valued customer.

Rejected Three Times!

I knew it was a shot in the dark and it did turn out to be a waste of time, other than creating content for this post. I essentially got rejected a second time in-person and was put on the phone with a Chase rep who wanted to tell me so a third time.

I asked why I was rejected (I knew, but I still love to ask) and was told I had opened too many accounts. I prodded further, asking how many was too many.

There was a moment of silence, then the rep asked if he could put me on hold. I said something to the effect of, “Why do you need to put me on hold? How many is too many?”

He hesitated, then reluctantly (but quickly) told me five was probably the magic number. I already knew this, but it’s always nice to hear it uttered.

I followed with something like, “But you guys sent me an e-mail telling me to apply.” And he said something like, “Yes, but we didn’t know the contents of your credit report. And now that we do, we can’t approve your application.”

So there you have it folks. Even if you are “pre-approved” you may well get rejected. Don’t be surprised if you do.

To avoid such surprises, check your credit report before applying (you can do this for free now using services like Credit Karma or Credit Sesame).

I believe in August a couple of credit cards will be older than 24 months and I should get approved for Chase Sapphire Preferred. Looking forward to trying again…

Author: Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.